A descriptive analysis of consumer’s price promotion literacy skills

Abstract

Purpose

The purpose of this paper is twofold: first, to provide a descriptive analysis of consumers’ ability to comprehend and use common price promotion information when they choose to do so (e.g. to find the least expensive price or to understand the savings amount); second, to identify which consumer groups (in terms of demographic characteristics) find price promotion comprehension particularly challenging.

Design/methodology/approach

An online questionnaire with 14 measures (four literacy, ten numeracy) was administered in the study. Data from 607 Australian consumers were analysed using descriptive, cross-tabulation, and multiple regression analysis via IBM SPSS analytics software.

Findings

On average, 20 per cent of the consumers surveyed were unable to comprehend the price promotion signage. On average, 13 per cent of the consumers were unable to carry out arithmetic tasks using the information on price promotion signage. Multiple regression models showed that income level was the main driving factor for the consumers’ price promotion literacy and numeracy levels.

Research limitations/implications

The present study is the first exploratory examination of consumers’ levels of comprehension (literacy) and effective use (numeracy) regarding common types of price promotion communication. The use of online samples and data collection method overestimates the results effect.

Originality/value

This is a pilot field study to investigate whether levels of consumers’ price promotion literacy and numeracy are adequate for everyday decision making. The information can be used as evidence and justification for further research.

Citation

Tan, P.J. and Bogomolova, S. (2016), "A descriptive analysis of consumer’s price promotion literacy skills", International Journal of Retail & Distribution Management, Vol. 44 No. 12, pp. 1223-1244. https://doi.org/10.1108/IJRDM-08-2015-0104